Gold Struggles Near $1,960 as Dollar and Yields Climb
In the latest market movements, GOLD prices are steadying in the Asian trading hours of Thursday, with the metal lingering around the $1,960 level after not sustaining the peak of $1,975. A resurgent US dollar and a climb in Treasury yields are applying bearish pressure on the commodity.
The Dollar Index, a gauge of the currency against six major peers, is currently trading near 104.40, recovering from recent lows. Concurrently, the yield on 10-year US Treasury notes has inched up to 4.53%, signaling investor caution.
Recent economic data from the US has shown a mixed picture: the Producer Price Index (PPI) for October unexpectedly dropped by 0.5%, contrasting with a previous increase and falling short of forecasts.
Retail Sales also declined by 0.1% in October, albeit less than projected. These figures have led to diminished expectations for imminent rate hikes by the Federal Reserve, with speculation arising about potential rate cuts in mid-2024.
On the global stage, robust data from China, the top gold-producing and consuming country, may provide a floor for gold prices. Market participants are now awaiting China’s House Price Index for further clues.
Additionally, the upcoming US Initial Jobless Claims and forthcoming remarks from Federal Reserve officials including John Williams and Christopher Waller will be scrutinized for their potential impact on gold’s trajectory.
Gold Technical Outlook
Technically, gold’s price briefly met the anticipated $1,975 target but retraced to challenge the $1,962.35 level. To maintain a bullish outlook, gold must stay above this juncture, eyeing the $2,000 mark as the next milestone. Conversely, a close below this critical level could exacerbate bearish dynamics, with a possible descent to the $1,933.30 support area.
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